Polkadot has executed a significant runtime upgrade on its mainnet, marking what the network calls the beginning of its "Second Age." The upgrade, announced on January 27, 2026, is designed to transform Polkadot into a "faster, simpler, more usable network designed for real apps."
The core technical improvements include faster app execution and quicker transaction finality, aiming to deliver a user experience closer to Web2 while retaining Web3's decentralized foundation. One of the most pivotal changes is the introduction of native smart contract support. Previously, developers had to deploy smart contracts and dApps on specialized parachains like Astar and Moonbeam, as the Relay Chain was solely for security and consensus. This upgrade simplifies development, allowing builders to "focus on products, not protocol engineering."
The project also announced changes to its tokenomics. The upgrade will lead to a "significantly lower token inflation" for DOT, with a fixed maximum supply of 2.1 billion tokens. This move is framed as creating "a network designed to last; for users, builders, and long-term holders."
In related news, Parity Technologies, the for-profit entity behind Polkadot's development, reported its first net profit in Q4 2025, earning $4.1 million. This turnaround is attributed to the return of founder Gavin Wood as CEO in August 2025, who implemented a leaner budget to curb previous lavish spending.
Despite the upgrade, market reaction has been muted. At press time, DOT was trading around $1.87-$1.90, with analysts noting choppy price action and a lack of strong bullish momentum. Derivatives data showed neutral sentiment, with steady Open Interest and slightly negative Funding Rates, indicating traders are in a "wait-and-watch" mode following the announcement.
